After all of the transactions for the year ended December 31, Year 1, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step income statement for the year ended December 31, Year 1. Enter all amounts as positive numbers EXCEPT in the Other revenue and expense section. In that section only, enter amounts that represent other expenses as negative numbers using a minus sign.
b. Prepare a retained earnings statement for the year ended December 31, Year 1.*
c. Prepare a balance sheet in report form as of December 31, Year 1. *
* Read the instructions above each financial statement carefully. They may contain specific instructions for completing the statement.
Income Statement data:
Advertising expense $ 150,000
Cost of goods sold 3,700,000
Delivery expense 30,000
Depreciation expense-office buildings and equipment 30,000
Depreciation expense-store buildings and equipment 100,000
Income tax expense 140,500
Interest expense 21,000
Interest revenue 30,000
Miscellaneous administrative expense 7,500
Miscellaneous selling expense 14,000
Office rent expense 50,000
Office salaries expense 170,000
Office supplies expense 10,000
Sales 5,313,000
Sales commissions 185,000
Sales salaries expense 385,000
Store supplies expense 21,000
Retained earnings and balance sheet data:
Accounts payable $ 194,300
Accounts receivable 545,000
Accumulated depreciation—office buildings and equipment 1,580,000
Accumulated depreciation—store buildings and equipment 4,126,000
Allowance for doubtful accounts 8,450
Bonds payable, 5%, due in 10 years 500,000
Cash 282,850
Common stock, $20 par
(400,000 shares authorized; 100,000 shares issued, 94,600 outstanding) 2,000,000
Dividends:
Cash dividends for common stock 155,120
Cash dividends for preferred stock 100,000
Goodwill 700,000
Income tax payable 44,000
Interest receivable 1,200
Inventory (December 31, Year 1),
at lower of cost (FIFO) or market 778,000
Office buildings and equipment 4,320,000
Paid-in capital from sale of treasury stock 13,000
Excess of issue price over par:
-Common 886,800
-Preferred 150,000
Preferred 5% stock, $80 par
(30,000 shares authorized; 20,000 shares issued) 1,600,000
Premium on bonds payable 19,000
Prepaid expenses 27,400
Retained earnings, January 1, 20Y8 8,197,220
Store buildings and equipment 12,560,000
Treasury stock
(5,400 shares of common stock at cost of $33 per share) 178,200